Daiichi is planning to sell the nearly 9% stake it currently holds in Indian pharma major Sun Pharmaceuticals, worth about Rs 22,300 crore (about $3.6 billion) at Monday's close of market, through block deals on Tuesday. If completed successfully, this will be the largest block deal in Indian history.

According to the term sheet for the deal, Sun Pharma shares are being offered in a band of Rs 930-1,040, a discount of as much as 11% at the lower end of the price band to the stock's Monday close at Rs 1,044. The book for the block deal is being offered through an accelerated book building process.

There were market rumours that Sun Pharma's promoters were buying half the block being offered by the Japanese firm. However, a spokesman for Sun Pharma said neither the company nor its promoters are buying any share in the block deal being offered by Daiichi.

According to a Reuters report, in an exchange filing in Japan, Daiichi said its board had approved the sale of all or part of the Sun Pharma stake, although it did not give any reason for its decision to exit the Indian drug major.

According to a note by a brokerage house, institutional investors who are being offered the shares should subscribe to the offer because of at least three reasons. One, the stocks are being offered at a significant discount to the market price.

Secondly, the expected synergy from consolidation of Ranbaxy into Sun Pharma, at the current price, appears to be under appreciated. And lastly, Sun Pharma's track record of turning around stressed assets is also a positive for investors to buy the stock.

Ranbaxy, India's biggest drugmaker by sales and 63.4 percent owned by Japan's Daiichi Sankyo Co Ltd, is banned from exporting drug ingredients to the US Sun Pharmaceutical's Karkhadi plant is also barred from shipping products by the US Food and Drug Administration.

Under terms of the agreed deal, Ranbaxy shareholders will get 0.8 of a Sun Pharmaceutical share for each Ranbaxy share they own. Daiichi Sankyo said in a statement that it will hold a stake of about 9 percent in Sun Pharmaceutical after the deal.

Sun Pharmaceutical Industries Ltd said it will buy Ranbaxy Laboratories Ltd in a $3.2 billion all-share deal, creating the world's fifth-largest generic drug maker from two firms struggling with quality issues in the lucrative United States market.

India's pharmaceutical industry, which supplies more than 20 percent of the world's generic drugs, according to PricewaterhouseCoopers, suffers from a lack of oversight including a severe shortage of regulatory inspectors.

The deal values Ranbaxy shares at 457 rupees apiece, representing an 18 pct premium to their 30-day volume-weighted average share price. Ranbaxy shares rose by nearly a quarter over the previous three sessions to close at 459.55 rupees on Friday.

"I wouldn't call this an exit. It's an ownership transfer," said Jefferies & Co analyst Naomi Kumagai. "Another company will take over control for them of a place that had a lot of issues. In that sense, it should be a good thing."

In a separate statement, Daiichi Sankyo said the US Attorney's Office in New Jersey had issued an administrative subpoena to Ranbaxy seeking information related to the company's Toansa plant in India. Ranbaxy is cooperating with the information request.

Sun Pharmaceutical Industries Ltd said it will buy Ranbaxy Laboratories Ltd in a $3.2 billion all-share deal, creating the world's fifth-largest generic drug maker from two firms struggling with quality issues in the lucrative United States market.

Japanese drugmaker Daiichi Sankyo is close to exiting India, ending a bitter 7-year run that saw it face regulatory challenges in several countries because of its ownership of Ranbaxy Laboratories, which it had bought from the Delhi-based Singh family in 2008.